55. Employees observe behavior and adopt standards of right and wrong.
56. “Actions speak louder than words!” is an old saying that refers to the fact that people’s
actions—how they act as opposed to what they say—are often testament to their true ethical
values.
57. As a manager, you have a responsibility for the unethical behavior of your employees.
58. In order to avoid the costly act of being sued in court, it makes good sense to manage
your business ethically.
59. Several years ago, the garment and soft goods industry agreed to adopt higher ethical
standards with respect to contract manufacturers that produce their goods. The leadership
agreed that this was a good approach in order to avoid the U.S. government’s intervening and
creating new laws to force the industry to only work with foreign manufacturers who operate with
high ethical standards. This was sensible strategy on the part of the garment and soft goods
industry.
60. Integrity-based ethics codes are based on avoiding legal punishment.
61.
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Compliance-based ethics codes are based on preventing unlawful behavior.
62. Businesses with a formal code of ethics are less common now than in the past.
63. Compliance-based ethics codes focus on preventing unlawful behavior by increasing
control and by penalizing wrongdoers.
64. In order to be successful, efforts to improve the ethical behavior of businesses must begin
with top management’s support of a corporate code of conduct.
65. People who report illegal or unethical behavior are called
whistleblowers
.
66. As a result of pressure from business lobbyists, Congress failed to pass legislation
protecting whistleblowers.
67. The job of an ethics officer is to serve as a counselor for employees and as an investigator
for the company.
68. Enforcement is perhaps the most important step in an effective code of ethics.
69. A code of ethics designed to avoid criminal misconduct is an example of a compliance–
based ethics code.
70. An integrity-based ethics code moves beyond legal compliance in order to create a “do–
the-right-thing” climate.
71. To be effective, an organization’s code of ethics needs to be communicated to outsiders
such as suppliers, subcontractors, and customers.
72. Since most ethics violations are small and rather insignificant in nature, employees need
to understand that addressing these issues is secondary to making profits. CEOs may be justified
in putting these on the back-burner, waiting for more convenient moments to address them.
73. America’s business ethics can improve simply by requiring written contracts with
employees, customers, and owners. This alone will do the job!
74. An important step in improving U.S. business ethics is for companies to hire
whistleblowers.
75. Dewy Cheatum encourages his employees to create and use legal loopholes to gain a
competitive advantage. In keeping within the legal limits of the law, the employees are within
their compliance-based ethics rights.
76. The brewers of Budweiser beer encourage their customers to drink responsibly. This
reflects a compliance-based approach to ethics.
77. Cigarette producers label their products with warnings of potential health hazards. Due to
the fact that this is a government-mandated disclosure, it is part of the industry’s compliance-
based ethics.
78. In light of the fact that over 60% of all theft in retail stores is committed by employees,
New Generations Clothier, Inc., requires that managers personally unlock fitting rooms for all
sales associates and count the number of items associates take to the fitting rooms. This policy
is written in the company manual. Breaking with the policy is grounds for dismissal. It is correct
to say that this is part of New Generations’ compliance-based ethics.
79. At Fast-Track Financial Services, it is not unusual for a financial consultant to lose a
client to another consultant working out of the same office. Clients have a right to do business
with whomever they choose. If it is a high-net worth client, with the potential for high
commissions on sales, the incentive to steal a fellow worker’s client exists because the firm’s
culture has not established integrity-based ethics to deter this activity.
80. Corporate social responsibility refers to the concern businesses have for the welfare of
society.
81.
Corporate philanthropy
refers to the position a firm takes on issues that affect society.
82. A charitable donation contributed by a corporation is an example of corporate
philanthropy.
83. Business issues such as minority hiring practices and pollution control fall under the
umbrella of corporate responsibility.
84. As a show of corporate responsibility to your customers, your firm may elect to provide
more information regarding your product than the law demands.
85.
Corporate philanthropy
refers to the position a firm takes on social and political issues.
86. When stating a firm position on various social and political issues,
corporate policies
often
commit company profits to back these positions.
87. Recent surveys indicate that students are willing to agree to lower salaries if they know
their employer is participating in socially responsible activities.
88. In the discussion of corporate social responsibility, stakeholders and stockholders refer to
the same group.
89. One responsibility of business is to satisfy customers by offering them goods and services
with real value.
90. Studies show that consumers are not concerned about the socially conscious behavior of
the firms with which they do business.
91. Customers learn to trust companies that consistently demonstrate good behavior. Those
same companies can lose this position with one socially irresponsible activity.
92. Some investors believe it makes financial as well as moral sense to invest in companies
whose practices promote sensitivity toward the environment.
93. “Fair disclosure” refers to a Securities and Exchange Commission rule that states when a
publicly traded firm discloses information, it must share it with everyone.
94. Insider trading occurs when employees of publicly traded companies use private company
information to profit in the stock market.
95. Insider trading provides the information needed for the securities markets to operate fairly
and efficiently.
96. Businesses have a social responsibility to create jobs.
97. Promoting social justice is a responsibility of society, but not business.
98. In the long run, a firm’s loyalty to their employees can pay off financially.
99. Getting even is one of the most powerful incentives for good people to do bad things.
100. A recent study revealed that employee fraud causes 30% of all business failures.
101. The green movement has turned the heads of very few firms.
102. A
social audit
is a systematic evaluation of an organization’s progress toward
implementing programs that are profitable.
103. The green movement has resulted in a positive impact on U.S. jobs.
104. A firm’s
net social contribution
is a company report that measures the difference between
its positive social contributions and its negative social impact.
105. A public good is one that everyone gets to enjoy regardless of who pays for it.
106. When it comes to ethics and social responsibility, the public’s perception of a firm is as
important as what the firm does.
107. A
social audit
measures a firm’s progress in the area of worker-management relations.
108. A list of “watchdogs” (including customers, socially conscious investors, and
environmentalists) monitor how well firms enforce their ethical and social responsibility policies.